Education, democracy and development

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Education, democracy and development
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Education and development

• Various issues

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Human capital

• Human capital data
• Education
• Age
• For historical period it is impossible to have
  education data especially for Asian and African
  countries
• One can use age heaping as a proxy for human
  capital

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Education and economic growth in historical period

• Various issues

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Age heaping as human capital indicator

• People of lower educational status (especially
  less numeracy) tend to report their age at
  round numbers
• Duncan Jones (1990) use of age heaping for the
  Roman Empire
• Bachi (1951) age heaping and education
• Mokyr applied age heaping indicators for the
  first half of the nineteenth century for the
  emigrants from Ireland to USA

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Relation between education and age heaping
br Brazil 1950, eg Egypt 1947, gt Guatemala
1950, ir Iran 1966, iq Iraq 1957, lk Sri
Lanka (Ceylon) 1963, ma Morocco 1960, mx
Mexiko 1970, tr Turkey 1965.
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Human capital

• From 1500 onwards literacy rates increased in the
  main regions of the Europe and Asia
• In Western Europe the rise of literacy rates is
  partly due to diffusion of printing press
• Literacy rose not lonely among elites but also
  common people

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Literacy during 1500-1800 (1)
Country Literacy in 1500 Literacy in 1800
Austria Belgium France Germany Italy Netherlands Sweeden Portugal Spain 6 10 7 6 12 10 10 1 1 21 49 37 35 22 68 85 3 2
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Literacy during 1500-1800 (2)
Country Literacy in 1500 Literacy in 1800
Eastern Europe Russia USA UK China India Japan Other Asia Africa 1 1 0 10 5-10 2 5-10 3 0 4 4 50 51.5 16-22 3 25-30 3 2
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Divergence Between Asia and Western Europe

• Before 1800 Western Europe did not have any
  particular advantage compared to Asia
• After 1500 European literacy rates increased
  considerably
• By the end of 16th century
• 1-2 percent of all European women were literate
• 10 percent of men were literate

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Education and development

• During Industrial revolution literacy in most
  developed countries ranged from 30 percent
  (France) to 45 percent (Great Britain and
  Holland)
• Education and development had a strong positive
  relation during 19th century
• On average countries with higher literacy rates
  has higher rates of growth in the 18th and 19th
  centuries

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Tripe engines of growth

• Western Europe forged ahead in the 18th century
  because it was the first region to develop
  triple engines of growth,
• human capital (peoples knowledge and skills),
  technology and organisational change
• UK Education revolution in 17th century
• Sweden Dominant protestant branch rules for
  marriage and increase in education
• Mid of 19th century Sweden had the highest
  literacy rates in the world

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Relation between formal education and
industrialization

• Short run view During industrial revolution
  literacy rates in Britain were stagnating
• Long run view by 1800 most developed countries
  in Europe had literacy rates substantially higher
  than the most developed countries in Asia
• Western Europe was not only the most literate
  region of the world, but also had the largest
  knowledge-base of techniques and the quality of
  human capital that mattered for industrialisation

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Europe vs Asia

• In Europe, Britain was the first to achieve
  sustained economic growth, because it was the
  first country in which the three engines were
  fully operational.
• In Asia, by the end of the Tokugawa period, the
  Japanese had better human capital, were willing
  to import technology and knowledge from outside
  countries, and organisational change was
  occurring in a significant scale.
• In contrast, in spite of a growth spurt during
  the early Qing period, by the 18th century China
  was lagging in all the triple engines of growth.

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Suggested paper

• Triple Engines of Growth Why did sustained
  growth emerge in Europe and not in Asia? By
  Alvaro Pereira

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Current educational trends and its relation to
development

• Various issues

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Education and GDP
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Social indicators for the early 1990s (GDP per
capita, PPP)
lt1000 1000-2000 2000-5000 5000-10,000 gt10,000
Infant deaths/1000 live births 107 73 33 30 6
Life expectancy 49 57 68 69 76
Physicians per 1000 33 88 161 181 231
Energy consumption per capita 46 189 977 2029 4857
Adult literacy 52 60 85 83 96
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Relation between Illiteracy and infant mortality
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Education and Infant Mortality
Infant mortality (deaths per 1,000 births)
Sub-Saharan Africa
South Asia
Middle East North Africa
Latin America Caribbean
East Asia
OECD
70
90
110
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Secondary education (females per 100 males)
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Relation between education and child
mortality
Under 5 mortality per 1,000
Years of education of mother (Average of
household survey results)
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Democracy and Development

• Various issues

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Suggested reading

• Empirical linkages between democracy and economic
  growth John F Helliwell
• Political economy of growth Democracy and Human
  capital Baum and Lake
• Democracy, political stability and economic
  growth Yi Feng
• Edward Muller Many papers
• Jose Cheibub
• Joerg Baten

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Relation between democracy and economic growth

• Democracy is more than just a brake or booster to
  the economy
• Many important questions Is it better that
  economic development and reform take precedence
  over the spread of democracy (China) or that
  democracy should precede economic reforms (like
  some Central and Eastern Europe countries)
• Are these two interrelated or independent?

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Seymour Lipsets study

• Examined relation between regime type and
  economic development in 48 countries
• 28 European countries
• 20 Latin American countries
• With in the first group he found that per capita
  income was more than twice in 13 stable
  democracies
• In the second group all democratic or unstable
  dictatorship countries have 40 percent higher
  income than stable dictatorships
• All the countries in the second group have lowest
  economic growth compared to the first group

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John Helliwell

• 125 countries from 1976-1985
• Economic development is measured by average per
  capita real income
• The measure of democracy is obtained by
  transforming measures of political rights and
  civil liberties by Gastil
• 0 with no civil and political rights
• 1 with both rights
• 42 percent of variance among countries in freedom
  index is explained by variations in per capita
  income

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Main results

• Countries at higher income levels are more likely
  to have democratic forms of government
• Effect of democracy on growth is likely to be
  negative than positive
• Effect of income on democracy is found to be
  robust and positive

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Other studies

• The effect of democracy on economic growth is
  subtle, indirect and contingent on levels of
  development
• Democracy has definitely positive effect on
  growth though life expectancy in poor countries
  and though secondary enrolment rates in non-poor
  countries

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Example using data set on democracy and
development
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Thank you